HSBC Bangladesh has arranged $46 million in low-cost foreign currency for local apparel exporter Viyellatex, which would spend the money on a new spinning mill.
The bank yesterday said, this was the country's first private sector agreement with Swiss Export Risk Insurance SERV, Switzerland's export credit agency.
The financing was arranged for Viyellatex Spinning to support the purchase of goods, equipment and technology from suppliers based in Switzerland, Japan, India, Germany and the UK.
Viyellatex Group is providing the rest of the $75 million (nearly Tk 600 crore) being invested in the spinning mill project.
“Interest rate of the loan is much lower than other US dollar loans in the international market,” Viyellatex Group Chairman KM Rezaul Hasanat told The Daily Star.
The financing also involves extensive and close cooperation between HSBC and Proparco, a French financial institution focused on funding sustainable development projects, according to a statement.
HSBC Bangladesh CEO Francois de Maricourt said, “This transaction highlights HSBC's leading position in export credit agency financing in Bangladesh, and demonstrates the growing relevance of ECAs for the local private sector.”
“It also demonstrates the strength of HSBC's international network and global banking capabilities,” he said.
Hasanat said Viyellatex Group was proud to receive this international financing package from HSBC.
The spinning mill has already been constructed and commercial production will begin after Eid-ul-Azha, he said.
Containing 92,000 spindles, the spinning mill will produce 50 tonnes of yarn per day to meet the growing demand in the local market, said Hasanat.
“This sort of structured financing will support the country's garment exporters to undertake quality capex (capital expenditure) decisions as well as achieve great mileage in international debt market,” he added.